THE IMPACT OF FACTORS IN THE FOOD AND BEVERAGE BUSINESSES OF LUXURY FASHION BRANDS ON CUSTOMER LOYALTY AND RETENTION

• Main Author: Fayola Irawan, Valerie
• Format: Final Project
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/85604
• Institution: Institut Teknologi Bandung

As businesses grow in the modern era, luxury fashion brands are becoming more than what they were. Many luxury fashion brands have taken the decision to branch out to the food and beverage industry, building restaurants and cafes all around the world. From brands such as Louis Vuitton, Dior, and more, they continue to introduce various types of food and beverage businesses such as café’s, pop-ups, and restaurants. This phenomenon is not studied as extensively, yet. Especially on its effects to consumer behavior and how it may benefit the business. As stated in a Vogue article, the author explained the intentions of luxury fashion brands in their diversification to a new industry. They claimed that brands continue the practice of diversification to attract customers and allow customers to spend more on their brands. Luxury brands are hopeful that investing in the food and beverage business would increase their brand’s desirability through providing a unique experience for customers. Exploring how the luxury fashion brands’ food and beverage business affect customer behavior may indicate the effectiveness of their intended purposes. Hence, this research paper will analyze the extent of increase in customer loyalty and retention through visiting a food and beverage business owned by a luxury fashion brand. The study uses a sample of 5 people who have visited at least one food and beverage business owned by a luxury fashion brand that are aged between 18 – 25 (young adults) for an interview and a personal observation of Ralph Lauren’s food and beverage business in Paris. The interview will analyze several factors which are interest, ambience and visual decoration, menu, service, impact of the food and beverage business towards buying decisions, customer loyalty and retention. Moreover, the personal observation will cover factors which are the location, ambience and visual decoration, menu, service, competition, and customer review. As most customers agree that the factors within the brand’s restaurants or cafes only affect their satisfaction in dining, the research found that the food and beverage businesses owned by luxury brands will not cause a definite increase in customer loyalty and retention towards the brand. This is because customers believe that visiting one of the brand’s restaurants or cafes acts as an independent experience from purchasing. Though, the food and beverage business does increase the interest and awareness of customers towards a brand. For the future, the study can continue to analyze different segmentations. As the current study focuses on young adults, diverse profiles can enrich the study through identifying different preferences across segmentations. For instance, profiles of the top 1% spender of a certain brand, customers from different geographical areas, or customers of different income class. This may reveal varying customer behavior than previous findings and lead to a more accurate conclusion by including most customer segments.